The Federal Reserve will be holding its highly-anticipated Federal Open Market Committee (FOMC) meeting Tuesday, December 18 to Wednesday, December 19. Federal Reserve Chairman Jerome Powell will hold a press conference at 2:30 p.m. ET on Wednesday. Consensus among economists remains that the Fed will raise interest rates; however, the real focus of this meeting will be on the Fed’s language about the central bank’s plan for the future.

“The more important question will be what signal the Committee sends about its policy path in the coming years. Overall, we expect the message to be that the Fed remains upbeat on the outlook and expects to raise rates further in the coming quarters,” Deutsche Bank wrote in a note on Friday.

TD Securities predicts that Powell’s speech will attempt to soothe investors amid the market volatility. “In his press conference we expect Chair Powell to continue to sound cautiously optimistic on the outlook and to try to calm market concerns about over-tightening.”

A Fed signal that its rate hike cycle is ending would be cheered by home buyers, corporate debt managers, stock markets and others eager for borrowing costs to stay low. It would be welcomed by U.S. President Donald Trump, who has frequently groused that the Fed is raining on his economic parade.

Inside the Fed, however, it would be an unsettling end to a process that began in December 2008 when policymakers cut the federal funds rate to near zero to fight a raging economic and financial crisis. Ben Bernanke, the Fed’s chairman at the time, called that move “the end of the old regime.”

Still, few expected that rates would still be this low 10 years later.

If the Fed’s targeted interest rate does peak at around 3 percent, or roughly half its average from the 1950s through 2007, it means that even “tight” policy means historically cheap money.

The Fed will likely repeat the September maneuver this week, raising the interest it pays on reserves a little less than the overall hike of 25 bp. If it increases the interest on reserves by only 15 bp instead, it would be seen a dovish hike by investors, we expect. Investors will also assess the rate move through the lens offered by the Summary of Economic Projections. The Fed does not provide forecasts like the ECB or the Bank of England. Each member of the Board of Governors and each regional president submits their own forecasts, and a range and median are quickly derived. These are what is referred to as the Fed’s views.

Answers to two questions will be the immediate focus. How many rate hikes are anticipated in 2019? What is the anticipated long-term rate, which is understood to be the controversial neutral rate? In September, the median forecast for year-end 2019 was 3.125%. The dispersion of forecasts was wide, with one official seeing as appropriate no more hikes after September and one official seeing four increases in 2019 as likely necessary. The median judgment of the neutral rate put it at 3.0% in a 2.50%-3.50% range of estimates.

The fourth quarter has been a challenging period for the market’s handle on the Federal Reserve. In early October, Powell emphasized how accommodative monetary policy continued to be, and many observers took this as an aggressively hawkish signal as there was quite a bit more tightening that would be delivered. Many blamed the downdraft in equities on these comments.

Chris Roush is the Walter E. Hussman Sr. Distinguished Professor in business journalism at UNC-Chapel Hill. He is a former business journalist for Bloomberg News, Businessweek, The Atlanta Journal-Constitution, The Tampa Tribune and the Sarasota Herald-Tribune. He is the author of the leading business reporting textbook "Show me the Money: Writing Business and Economics Stories for Mass Communication" and "Thinking Things Over," a biography of former Wall Street Journal editor Vermont Royster.

This website is operated by Chris Roush, who teaches “Writing and Reporting,” “Business Reporting,” “Economics Reporting,” and “Business and the Media” at the University of North Carolina at Chapel Hill.